No breather on news front in 1994; auto industry moves from ICU into recovery room

Like the automotive industry's swiftly rebounding sales, there was scarcely a breather on the news front in 1994.

Each of the U.S. Big Three automakers reorganized in varying degrees; each entered critically important new vehicles on the market; and it was a turbulent year for the Japanese-based automakers, who were hit by the double whammy of market softness at home and rising U.S. prices triggered by the yen's rising strength against the dollar.

Here's a sampling:

JANUARY: Edsel Ford II is elevated to a vice presidency at the company founded by his great-grandfather, while remaining president of Ford Motor Credit Co. His cousin, William Clay Ford Jr., doesn't make vp. until April when, as part of sweeping Ford reorga nization, he takes charge of the newly created Commercial Truck Vehicle Center. Both of the young Fords seemingly are charted for higher spots at this point, but Billy jolts the troops by resigning as a company officer in September to become finance-committee chairman, succeeding his father, on Jan. 1 this year. On the product side, WAW reveals Cadillac will offer an "entry-level" LSE version off the Adam Opel AG Omega platform in 1996, and as the year progresses it becomes clear that General Motors Corp.-North America and GM-Europe plan more platform and powertrain swaps to fill specific product needs on a global basis. Meanwhile, Germany's BMW AG buys an 80% share of Britain's Rover Group for $1.2-billion in a brillant and surprising move.

FEBRUARY: Big Three 1993 financial results come in and show a sharp reversal from 1992's dismal performance, with GM generating black ink ($2.5 billion) for the first time since 1989. Still, Gm's North American earnings aren't enough to trigger profit-sharing except at Saturn, where workers haul down $5,100 each for meeting productivity and quality goals. Chrysler Corp. profit-sharing averages $4,300, Ford's $1,350.

MARCH: Executive bonuses make their triumphant return at Chrysler and Ford, but Gm's brass needs a tin cup. Harold A. (Red) Poling retired as Ford's chairman in November 1993, but he still pockets an NBA-size $11.75 million in salary, bonus and stock options for '93. His successor, Alex Trotman, gets $3.93 million. At Chrysler, Chairman Bob Eaton makes $9.3 million and President Bob Lutz's package totals $9.75 million. At GM, President Jack Smith has to settle for a paltry $1.44 million and no bonus.

APRIL: Ford unveils plans to merge its North American and European operations into a single global organization called Ford Automotive Operations and targets annual savings of up to $3 billion yearly by 1999. Later dubbed "Ford 2000," the scheme creates five vehicle product development centers and ties them directly with manufacturing, purchasing and other functional groups. Ed Hagenlocker, who headed the old North American side of the business, is elected FAO president, and Ford of Europe Chairman Jacques Nasser is named group vice president-product development. FAO is targeted to begin taking hold on Jan. 1, 1995. Other bulletins: Big Three first-quarter results come in, and they're coining it: Chrysler's profits jump 66% to a record $938 million, GM rakes in $1.6 billion for its best showing in a decade; and Ford's profits zoom to $1.3 billion.

MAY: Ford's Mr. Trotman seemingly suggests he's out to surpass GM as the world's largest automaker by 1999, but later clarifies that's not Ford's official goal--although it'll have capacity to do so by that time.

JUNE: Toyota Motor Corp. General manager-International Purchasing Koichiro Noguchi says U.S. suppliers are making progress, but still lag behind Toyota's traditional vendors in quality and prototype-parts delivery. Even so, Toyota boosts U.S. purchases from $4.6 billion in '93 to an estimated $5.4 billion in 1994, climbing to $6.4 billion in '96 to ward off political pressures from Washington.

JULY: GM's long-awaited management reorganization is revealed, with G. Richard Wagoner becoming NAO president, J.T. Battenberg III president of the split-off Automotive Components Group Worldwide and J. Michael Losh chief financial officer. GM says it'll look inside and outside to find a replacement for Mr. Losh as head of NAO sales, service and marketing, setting off a speculation spree that doesn't end until November when Bausch & Lomb Corp. President Ronald L. Zarella gets the pivotal job. AUGUST: Second-quarter profits are talllied, and they're big: GM, $1.9-billion, Ford $1.7-billion and Chrysler $956 million. Ford's CDW27 world cars, Contour/Mystique, begin moving to dealer showrooms.

SEPTEMBER: The Federal Reserve, worned about inflation, raises interset rates another 1/2$%, triggering lower auto industry forcasts in some quarters. University of Michigan economists drop back to 14.7 million for '94 and '95, barely edging up to 15.9 million in '96. GM some with 15.3 million for '94, and that comes close to final figure.

OCTOBER: Gm's revamped J-cars--Chevy Cavalier and Pontiac Sunfire--are poised for introduction, but production and quality snags keep them virtually invisible on the nation's highways even as 1994 comes to a close. GM's Mr. Wagoner, meantime, puts his imprint on NAO by restructing operations into five main groups: Small car, midsize and luxury, trucks, powertrain and sales/service/marketing. Chrysler also reorganizes, putting more firepower into its manufacturing operations. Wall Street beats up on GM for losing $328 million on NAO during the third quarter while Chrysler and Ford wallow in greenbacks with record profits--$651 million and $1.12 billion, respectively.

NOVEMBER: Ford and Volkswagen AG call it splitsville in Brazil, moving to dismantle their vintage-'87 Autolatina joint venture. It'll take about a year Ford moves ahead, however, with a $450-million project to build European Fiestas there starting in 1996. Chrysler gets a scare from its largest stockholder, Kirk Kerkorian (see Auto Talk p. 19), but in December gives him what he wants.

DECEMBER: Transportation Secretary Federico Pena, who'd direatened GM with a mandated recall of its 1973-'87 C/K pickups mounted with sidesaddle fuel tanks and planned a Dec. 6 hearing, backs off after GM comes up with a $5 1-million automotive safety package. Mr. Pena's rationale: The dough will save lives immediately while the C/K dispute could go on for years, providing no safety advantage for owners during the interim.

Those retiring at year's end: Ford's Allan Gilmour and Stan Seneker, GM's Bill Hoglund and Chrysler's Glenn Gardner.